Giant Negative Value Added

I am working with the 2014 state data. In the state of Idaho for Sector 21 - Extraction of Natural Gas Liquids, the Industry Production data suggests that the Value Added Coefficient is -1.715897. This is due to the Total Intermediate expenditures (as shown from the total Absorption Value) is 2.715897, so for every dollar of output there are $2.71 of inputs before labor, capital etc.
I have seen negative value added - usually in agriculture - but never something anywhere near as large as this. Is this simply a data error, or is it possible that this industry is actually losing so much money?

Comments

Hello John,
Every year, we obtain data on value-added components by state, at roughly the 3-digit NAICS level, from the BEA. This data series combines, conceptually, IMPLAN’s Other Property Income (OPI) category and Proprietor Income (PI) category into something called Gross Operating Surplus (GOS). The data are available at a 1-year lag relative to the IMPLAN data year (e.g., IMPLAN’s 2014 uses data for 2013 from the BEA, which IMPLAN projects). At the level of industry detail available from the BEA in this series, we know data only for BEA Industry Code 7 “Oil and gas extraction”, which maps to IMPLAN sectors 20 and 21.
As can be seen in the attached spreadsheet, the BEA data available at the time reported Industry Code 7 to have GOS of only $6 million in 2013 (the figure has since been revised to $8 million). To divide GOS into its component OPI and PI parts, IMPLAN uses estimates of PI from the BEA in a similar series. As can also be seen in the attached spreadsheet, BEA’s implied PI in 2013 in that sector in Idaho was approximately $63.4 million. This implies a 2013 value for OPI of -$57.4 million, a substantially negative value.
IMPLAN then needs to project this value to 2014 dollars and then disaggregate the projected value into the two different IMPLAN sectors. IMPLAN uses our Employment and EC estimates for projection (the number became somewhat less negative since the combined sector grew in terms of Employment and EC between 2013 and 2014, but remained negative) and BEA Benchmark ratios to distribute the value to IMPLAN sectors 20 and 21 (you will note that both sectors have negative OPI in your model). Finally, these values are all controlled to 2014 U.S. control totals.
Please see here for more details about our processes for Other Value Added:
http://support.implan.com/index.php?option=com_kunena&view=topic&catid=80&id=19366&Itemid=1840#20727http://support.implan.com/index.php?option=com_content&view=article&id=286:286-transferred&catid=226:226
Regards,
IMPLAN Staff